Surveys in collecting Services Trade Data

Examples from India

Avishek Guha

Department of Commerce, India

Outline of the Presentation-

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1. Services & Trade in Services – Importance

2. Meta data for measuring Trade in Services

3. Measurement of Services Trade – Data Collection (Indian context)

4. Need for a robust framework of data collection – Survey

5. Survey Instruments-

6. Survey findings-

1. Importance of the Services Sector

In 2014, the services sector contributed almost 70 percent of global GDP

Services trade has a share of 20% in total world trade

ILO projects that by 2019, one-third of the global work force will be

employed in the services sector

Global merchandise trade increased by 2% in value terms in 2013-14

whereas trade in commercial services increased by 6 %

The growth in services trade the past two decades has been fueled by

factors like penetration of Information Technology, new business models and

inclusion of services in the Free Trade Agreements

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1.Importance of Services Sector- Indian Context

Among developing countries for India, the services sector accounts for

60 percent of India’s GDP

Trade in services constitutes 27% of India’s total trade

Liberalisation, economic reforms , high income elasticity of demand

for services has been the factors behind the growth of services sectors

Technological progress and the presence of highly skilled manpower

has led to the growth of IT and ITES services

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India’s Export and Import of Services (in $ million)

India has been a net exporter of services since 2005

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2. Meta data for Services Trade

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Total Export

Total Import

Level of Disaggregation for Merchandise Trade Data

Total Export Commodity1

Commodity 2

Total Export Commodity1 Country1

Country2

Commodity2 Country3

Country4

2. Meta data for Services Trade-cont.

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Total Export

Total Import

Level of Disaggregation for Service Trade Data

Total Export Service 1

Services 2

Total Export Service 1 Country 1

Country2

Service 2 Country2

Country2

Total Export Service 1 Country 1 Mode1

Mode 2

Country2

Service 2 Country2

Country2 Total Export Service 1 Country 1

Country2

Service 2 Country2

Country2

2. Meta data for Services Trade-Classification

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W/120

• Services Sectoral Classification

• Based on provisional UNCPC list

UNCPC • Version 2.1

BOPS

• 12 services

• consistent with GATS classification

EBOPS • Extended Balance of Payment Statistics

3. Measurement of Services Trade-

ITRS Approach

• International Transaction Reporting System

Enterprise Survey Approach

• Sector Specific enterprise surveys

Mixed Approach (Combination of ITRS & Survey)

Other Data sources

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3.Measurement of Trade in Services –Indian Context

The Reserve Bank of India collects data on foreign exchange transaction

form AD’s or banks under the Foreign Exchange Management (FEMA) Act

FETERS – Foreign Exchange Transaction Electronic Reporting Systems

Captures all transactions relating to exports, imports, non-exports,

intermediary exports & intermediary imports

FETERS data works as input in compiling Balance of Payment (BOP)

Statistics –provide aggregate level statistics of service trade following BPM6

classification

Other source of trade data includes data from Ministry of Tourism, CBEC,

NASSCOM

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3.Limitations of ITRS approach- Indian Context

Absence of Bilateral and mode-wise services trade data

Indirect Form of reporting- misclassification

Deviation from BPM6 recommendations

Lack of comprehensive coverage

Need for a robust system of services trade data collection- transition

to a mixed approach of services trade data collection

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4. Setting up of robust system of services trade data collection

Expert Committee set up by Central Statistics Office in 2011

Recommendations include supplementing ITRS with enterprise

surveys

Department of Commerce- Technical Expert Committee under the

chairmanship DGCIS

Objective included identification of relevant services categories and

sub categories for compilation of services trade data and conduct

surveys

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4. Setting up of robust system of services trade data collection-contd.

Sectors identified-

1) IT and IT enabled services

2) Tourism

3) Telecommunication Services

4) Education Services

5) Medical Services

6) Professional Services

7) Audio Visual Services

8) Logistic Services

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Classification to be adopted-

Creation of a Business Directory (Sampling frame)

Designing the Questionnaire

Determining the mode of the survey-

5. Survey Instruments

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5. Survey Instruments- Creating a Business Directory

Industry association, regulatory institutions, business councils,

professional bodies were consulted to access their member list

Companies were selected based on the following criteria-

-Indian companies which are exporter \importer

-Indian Companies having a stake in foreign company

-Indian company having a joint venture

-Subsidiaries of Foreign company

-Indian company sending employee abroad

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5.Survey Instruments- Creating a Business Directory

A database of 581 audio-visual companies across different sub-

segment was prepared

A directory of 2000 logistics companies providing integrated of

specific services was created

A list of 20,861 individual, companies and firms were prepared

catering to architecture, legal, engineering, consulting, accounting,

auditing and book keeping services

For the telecommunication sectors 397 companies were listed

Business Directory of 23, 846 service providers covering 4 sectors

was created.

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5.Survey Instruments- Questionnaire Design

Questionnaire was designed to covered international trade in services by

mode

It was designed with questions regarding company name, address,

employment, form of operation and turn over

The respondents were required to mention sub-sector (UNCPC ver.2) in

which they have trade and investment

Country-wise receipt and payments of foreign exchange was sought

Questions were framed on investment made or received

Detailed questions were asked on persons sent or received on business

visas and work permits

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5. Survey Instruments- Determining the mode of the survey

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Enterprise Register

Offline

Mode

Online

filling

6.Survey Findings

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6.Sectors- Audio-Visual Services

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Subsectors include-

1. Motion flim & Video Tape production, distribution-

2. Television broadcast originals and programmes-

3. Radio

4. Post production, sound recording-

5. Animation, Digital Advertising-

Major Film exporting country with markets in North America, UK

and Middle East

Technically skilled work force, low labour cost and sector specific

infrastructure –infrastructure facilities

6.Sectors- Logistic Services

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Subsectors include-

Transportation-

-- Maritime Transportation

-- Air Transport

Warehousing-

Freight Forwarding

Value Added Services

Significant investment has taken place in this sector

India among top 10 WTO member countries in the export and import

of logistics services

6.Sectors- Professional Services

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Subsectors include-

1. Legal Services-

2. Engineering Services-

3. Accounting Services-

4. Management Consulting-

5. Auditing & Book keeping services

6.Sectors- Telecommunication Services

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Subsectors include-

1. Basic Telecomm Services-

2. Internet Services-

Domestic Telecom sector accounts for 3% of the GDP

The sector is dominated by some major player like MTNL, BSNL,

Bharti Airtel, Idea Cellular, Vodafone

Indian telecom companies have established their presence abroad

directly

or through mergers & acquisitions

100% FDI is allowed in the sector

Survey Response-

A sample of 942 companies were selected from the Business Directory of

23,846 service providers

Response from the survey-

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Survey findings-

Status of Registered Service providers-

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85 companies out of the sampled 200 responded to the survey

Presence of of Companies in Major Sub-sectors of Audiovisual Services

Survey findings- Audio Visual Sector

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Survey findings- Audio Visual Sector

US, UK & Singapore were found as top three destination of export as well as

source of Import Top Countries for Trade by Sub-Sectors in Audiovisual Services

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Survey findings- Logistics Services

87 companies responded to the survey with non response from major players

Logistics companies engaged in international trade were operating in multiple

sub sectors

Presence of companies in Major Sub-sector

Survey findings- Logistics Services

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Survey findings- Logistics Services

Sectoral berak-up revealed that 5 subsectors accounted for more than

85% of trade volume

Sub-Sector Share of Trade in Logistics Services (in %)

Singapore, Hongkong, US, UAE & Israel were the top five trading

partners 6/28/2016 29 DGCIS

Survey findings- Professional Services

Presence of Companies in Major Sub-sectors of Select

Professional Services

Survey findings- Professional Services

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Survey findings- Professional Services

Presence of Companies in Major Sub-sectors of Select Professional

Services

Survey findings- Professional Services

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Survey findings- Professional Services

Presence of Companies in Major Sub-sectors of Select Professional

Services

Survey findings- Professional Services

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Survey findings- Professional Services

Survey showed a positive trade balance

Top Ten Countries of Export and Import in Professional Services

Rank Exports Imports

1 US US

2 UK UK

3 Bangladesh Singapore

4 Japan China

5 Germany UAE

6 Oman Korea

7 Singapore Germany

8 Australia Italy

9 UAE Hong Kong

10 Indonesia Finland

Little information on Mode-4 6/28/2016 33 DGCIS

Survey findings- Telecommunication Services

Significant non response

Reasons- Oligopolistic market, transfer pricing etc

Major Sub-Sectors of Presence of Companies Telecommunication

Services

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Issues-

Absence of pre established Business Directory

Survey Non response

-Lack of proper regulatory framework

-limitations of the Collection of Statistics Act

Questionnaire issues

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Way forward-

Business Directory-

-Convergence of all stakeholders

-Unique identification of service providers

Need for a regulatory framework for Services Data collection

-Shift from collecting to reporting

- Due care to the confidentiality issue

- Penalty in line with global best practices

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Questions ?

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THANK YOU